The ability to accurately estimate the extent to which the failure of a bank disrupts the financial system is very valuable for regulators of the financial system. One important part of the financial system is the interbank payment system. This paper develops a robust measure, SinkRank, that...

The 1970s and early 1980s witnessed two main approaches to the analysis of monetary policy. The first is the early new classical approach of Lucas, based on the assumptions of rational expectations and market clearing. The second is the a theoretical econometrics of Simsâ??s VAR program. Both...

This paper examines the measurement of social welfare, poverty and inequality taking into account features that have been found to be important welfare determinants in behavioural economics. Most notably, we incorporate reference-dependence, loss aversion and diminishing sensitivity - aspects...

The first aim of this paper is to clarify the differences and rela-tionships between cumulative advantage/disadvantage and the Matthew ef-fect. Its second aim, which is also its main contribution, is not only to present a new measure of the Matthew effect, but also to show how to esti-mate this...

In most economics textbooks there is a gap between the non-existence of utility functions and the existence of continuous utility functions, although upper semi-continuity is sufficient for many purposes. Starting from a simple constructive approach for countable domains and combining this with...

This paper is concerned with the problem of ranking and quantifying the extent of deprivation exhibited by multidimensional distributions, where the multiple attributes in which an individual can be deprived are represented by dichotomized variables. To this end we first aggregate deprivation...

What is the output of financial institutions? And how can we measure their nominal and, more importantly, real value, especially since many financial services are provided without explicit charges? This paper summarizes the theoretical result that, to correctly impute the nominal value of...

I argue that equipment price deflation might be overstated because the methods used to measure it rely on the erroneous assumption of perfectly competitive markets. The main intuition behind this argument is that what these price indices might actually capture not a price decrease but the...

This note points to certain similarities of orientation and outcome between Derek Parfit’s quest for a theory of beneficence and Amartya Sen’s quest for a suitable realvalued representation of poverty. It suggests that both projects, in a certain sense, have been instructive failures. Using...

We propose a measure for systemic risk: CoVaR, the value at risk (VaR) of financial institutions conditional on other institutions being in distress. We define an institution's (marginal) contribution to systemic risk as the difference between CoVaR and the financial system's VaR. From our...